The Australian financial regulatory authority has announced a consultation regarding new guidance for the buy now pay later (BNPL) sector, set to be implemented in June 2025. These upcoming regulations aim to preserve the advantages of BNPL agreements while enhancing consumer protections for Australians.
A draft of Regulatory Guide 000 and Consultation Paper 382 has been made available for feedback from the industry and various stakeholders. Starting June 2025, providers in the BNPL market will be required to obtain a credit license and adhere to the obligations mandated by the National Consumer Credit Protection Act 2009.
If a BNPL agreement qualifies as a low-cost credit contract, specific regulations will apply. The draft guide seeks to assist providers in grasping their essential responsibilities, particularly regarding compliance with modified responsible lending obligations and requirements for electronic accessibility of information.
The regulatory authority has expressed its eagerness for commentary on the draft guidelines as outlined in the consultation paper. Under the Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Act 2024, the reforms will take effect six months following the Act’s Royal Assent on June 10, 2025, or an alternative date set within that timeframe.
Stakeholders interested in providing feedback are invited to submit their comments by email before 5 p.m. AEDT, March 7, 2025. The recent legislative changes amend the National Consumer Credit Protection Act by extending the National Credit Code to include buy now pay later agreements.
The new regulatory framework will introduce distinct responsibilities for BNPL agreements that meet the low-cost credit definition. Providers will have the option to adhere to modified responsible lending obligations.
Moreover, in January 2025, information was shared to detail the credit licensing prerequisites for all parties engaging in credit-related activities linked to BNPL contracts.
As a regulatory body, the authority oversees a wide range of corporate, market, and financial service activities across Australia. In summary, the introduction of these new regulations is designed to ensure that the benefits of BNPL offerings continue to be available while simultaneously safeguarding consumer interests. The ongoing consultation process reflects a commitment to working collaboratively with industry participants to refine the regulatory framework before its implementation.